Tuesday, September 30, 2008

Last week I wrote a briefing on the upcoming carbon credit auction, Northeast Puts on the Carbon Cap. In the article I identified a few kinks in the system that might make the Regional Greenhouse Gas Initiative less than successful in the long run. A more immediate threat, however, may be the effect the credit crisis is having on markets in general.

When I spoke with RGGI Inc. spokesman Jonathan Schrag a week before the auction, I asked whether the organization was concerned about there being too many credits for sale – the total allowance easily exceeded current emissions. Though unable to disclose just who would be taking part, Schrag was convinced that, with over 100 registered bidders, the “broad participation” would ensure success.

One week and a few collapsed banks later, that participation was no longer a given; concerns about the credit-crunch fallout on Wall Street affecting the RGGI auction seem to have borne themselves out. Although the emissions allowances sold for $3.07 – higher than the $1.86 floor price set before the auction, the prices did not reach the levels anticipated on the futures markets.

Is lackluster interest from the financials to blame? According to today’s press release 59 entities submitted bids, with “compliance entities,” the utilities that will be bound by the emissions cap, purchasing most of the credits. This differs greatly from the European emissions market, where financial companies play an active role. There, carbon trading is big business, and companies seek out creative ways of reducing or abating their emissions so they can sell their allowances for a profit. The well-functioning (since last year's reforms) market ensures emissions reductions come at the best price and with the lowest economic penalty.

The recent turmoil in the financial sector may thus have claimed yet another victim – one few have even noticed. As everyone is focused on the astronomical bailout, the falling house and stock prices, and the economic slowdown, global warming concerns are taking a back seat. Could this be yet another example of pocketbook issues trumping the environment?

Wednesday, September 17, 2008

Policy Innovations staff is traveling this month on a couple projects related to climate change.

GPI Director Devin Stewart is leading a Carnegie Council delegation to Beijing to lay groundwork for China-Japan-U.S. dialogues on ethics, energy, climate change, and faculty development.

Devin will be accompanied by Joshua Eisenman, an Asia Studies Fellow at the American Foreign Policy Council and Ph.D. candidate at UCLA; Jonathan Gage, a Carnegie Council trustee and principal of Booz & Company, where he also publishes its magazine strategy+business; Harry Harding, University Professor of International Affairs at the George Washington University; and Alex Westlake, managing director of ClearWorld Energy (based in Beijing).

Stewart and Eisenman are coordinating the itinerary with the China Reform Forum in Beijing. Institutions to be visited include Peking University, Renmin University, Chinese Academy of Social Sciences, and the China Institutes of Contemporary International Relations. The trip was made possible by generous support from ClearWorld Energy.

Monday, September 8, 2008

They say American presidential candidates must sell their product retail. But as the nominating conventions of both major American political parties recede into memory, all I can think is:

Someone just wasted a lot of money.

But then it’s not just the money that's wasted, is it? When I looked at the faces in the convention crowd, I didn't see Republicans and Democrats, Northerners and Southerners, delegates and super-delegates. Instead, I saw tens of thousands of roundtrip airfares and as many or more rental cars. And for what?

Originally intended to facilitate the choice of a candidate by delegates from far-flung states, these conventions have evolved into something entirely other, but, nevertheless wholly American: A product launch.

The major political parties can no longer afford to indulge in the messy, unpredictable nominating conventions of the past. The election cycle has elongated while the news cycle has collapsed on itself. Like celebrities and big corporations, politicians have got to manage their brands. And that means driving news coverage. A successful convention does that.

While it might be good for business, it's a bad model for the 21st century.

Last year, Matthew Taylor, Chief Executive of The Royal Society for the Encouragement of Arts, Manufactures & Commerce (RSA) in the U.K. came to the Carnegie Council for a discussion of Climate Change and the Green Economy. He made several points, but the one that stuck with me related to business travel.

I was just thinking on the way over here, sitting in a business class absolutely filled with business people – all exhausted, all away from their families, all going to business meetings. When is this going to stop? Of course the reason it can’t stop is if you are pitching for a contract and there are five of you competing, and four of you fly, and one of you tries to do it remotely, then you’re going to lose. When is business going to get to the stage where they say, “Actually, we only want to talk to people virtually.”

Both the Democrats and the Republicans tried to sell their conventions as "the greenest convention ever." But that is just preposterous. A green convention would be one where all the delegates stayed home, watched the speeches on YouTube, and cast their votes via secure online connections. Seems like it would be easy to do.

Unfortunately, if one party tries it and it flops, then like the business travellers in Taylor's example the other will feast on that failure.

I know somebody has to lose. But do they have to waste so much doing it?

Friday, September 5, 2008

It may strike you as odd that I am bringing into question the utility of the nation-state during Russia’s military action in Georgia. But I would argue that conflicts over nationhood only make my point: the pervasive understanding of statecraft as being strictly in the interest of the “nation-state” may obscure the nature of the threats that face humanity.

The ideas of a European Union and the Universal Declaration of Human Rights were considered radical years before those projects started. At the very least, we on this Earth must realize that we are all in the same boat, and our destinies are tied to one another. We don’t have to be wedded to a concept, the nation-state, that is fuzzy to begin with and destructive when abused.

In any case, here is the original piece. My argument may be a bit unusual, but I hope it helps move a useful debate. Let me know what you think. I put the piece on the blog because several people expressed interest in commenting on it.

Ending the Nation-State Myth

This fall, thousands of college students will be taught a myth presented as fact. It is a myth that has helped fuel wars and may hinder finding solutions to the world's biggest problems. Though the origin of this myth is cloudy, science has proven its falsity, and a globalized world has rendered it anachronistic. I am talking about the nation-state.

The nation-state myth conflates two ideas, one that is concrete, the state, and one that is fuzzy, the nation. The utility of the state is clear. It is a necessary organizing principle that allows people to pool their resources for the common good and mobilize against common threats, whether they are floods or invading armies. The state is also the final arbiter of law. State power is even on the rise, partly as a backlash to globalization and as a result of growing wealth from energy markets.

But the nation-state as a basis for statecraft obscures the nature of humanity's greatest threats. Pollution, terrorism, pandemics, and climate change are global phenomena. They do not respect national sovereignty, and, therefore, they necessitate global cooperation.

The origin of the nation-state idea is unclear. Most agree that it offered a way to consolidate and legitimize a state's rule over a group of people, whether defined by a common language, culture, or ethnicity. The problem is that the contours of a cultural community rarely coincide with a political entity.

Nor does the ideal of national unity account for internal diversity and conflict. Identities within nations are fluid, even from minute to minute. About 15 years ago, I spent a summer in France's Loire Valley. As many travelers to France will attest, people in the French countryside believe that they, not Parisians, constitute the "true" France.

This division of core and periphery is common in many countries. But I also noticed that a person's identity would change during the course of a conversation. "We French" would give way to "We Gauls," "We Latins," "We Bretons," "We Franks," or "We Europeans" depending on the topic. This ever-changing identity was startling, but, on second thought, it made sense: after all, Charles de Gaulle famously said that it is difficult to govern a country with 246 types of cheese.

China is often thought to be governed by the Han majority. But this group is linguistically, culturally, and even genetically diverse. As the author Ian Buruma recently mused, it is not clear what people mean by "China." Taiwan is an independent state but is officially part of China. Chinese culture and language has spread all over the world. "China" is much more than just a nation-state, Buruma concludes. Taiwanese scholar Lee Hsiao-feng has recently argued that the concept "Chinese" is a meaningless word that was fabricated to justify rule over minorities.

It is difficult to imagine a nation that is confined to one state or a state that contains one nation. Some argue that Japan is an example of a nation-state. In countless heated discussions, I have reminded many Japanese that the Japanese people actually comprise Ainu, Koreans, Chinese, Filipinos, and Ryuku. Their response is always: "Yes, but we want to believe that there is a Japanese people." They even have a field of study devoted to examining what it means to be Japanese.

Like religion, the nation-state myth requires a leap of faith. Japanese scholar Yoshihisa Hagiwara argues that since it is not grounded in fact, the nation-state myth is bound to dissolve, giving way to an understanding that we are merely individuals who are part of a global community. He laments that the Japanese are especially fond of the idea of "Japaneseness," making it possible that Japan may become the "last hero" of a dying ethos.

Expressions of this notion appear in popular culture. A recent credit card commercial depicts a father and son traveling to Norway to trace their family's origins. After bonding over local beer, food, sweaters, and swimming, they discover their family is actually from Sweden.

If I were to take that trip, I might have gone to Ireland to discover that my Irish ancestors were originally from Scotland. But where were the Scots from? Just across another sea, perhaps. The origin myth continues ad infinitum until we reach humanity's common ancestor, or an actual myth—a black egg in China, a spear in the ocean in Japan, or the interaction of fire and ice in France.

If policymakers are to address today's problems, they must think more broadly. One place to start may be to reexamine the concept of the nation-state, which students around the world are taught is the basic unit of international relations. Beyond the core Realist theories of balance of power, an introduction to ethics in international affairs—moral philosophy, human rights, and the role of nonstate actors—should be mainstreamed in international relations curricula.

As the philosopher Peter Singer showed in his book One World, a united front against the biggest problems facing the world will require a fundamental shift in attitude—away from parochialism and toward a redefinition of self-interest. Enlightened self-interest can be state-based, but interests would be redefined to encompass universal principles such as the Universal Declaration of Human Rights. If these interests are to gain universal recognition, we will need to shed the nation-state myth once and for all.

Wednesday, September 3, 2008

Last July, the New Yorker ran an excellent article called "Turf War" about the history of the American lawn: How we can't live with them or without them, and how destructive they are to our environment. The article presented several more sustainable options for the home owner, including planting wild flowers, letting the lawn turn into a meadow, and cultivating a backyard farm. Today, I spoke with Fred Gerendasy from Cooking Up A Story, which, among other things, profiled two women in Portland who started up a backyard farming initiative. Check it out: